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Tariffs will drive up home costs, builders say

September 15, 2016 5:48 P.M.

There is a strong case for appealing high tariffs imposed on imports of U.S. drywall, tariffs that will push up the cost of new homes, says the Canadian Home Builders Central Interior.

Tariffs ranging from 105 to 276 percent have been imposed on drywall originating from the United States. The tariff was the result of a complaint about American competitors offering cheap product that came from CertainTeed, Western Canada's only supplier.

Canadian Border Services Agency (CBSA) has made a preliminary determination of dumping of drywall imported into Western Canada.

“Given that the tariff was effective immediately on CGC drywall, CertainTeed announced a price increase effective Sept. 8 of 12 percent,” said Kamloops Home Hardware’s Ryan Kurzac, a CHBA director. “We’re being told that they will be announcing another increase here this month of somewhere in the range of 12-25 percent.“

CertainTeed drywall is not subject to the tariff since they manufacture in Canada. With these increases, they are closing the price gap between imported in relation to drywall manufactured in Canada.

The Canadian Home Builders Association (CHBA) is concerned about the immediate effect on Western Canada because the duty applies to drywall destined for use in the West. At the national level, CHBA has already seen the price increase creating ripple effects on price and supply all across Canada, affecting renovations and new home construction costs that ultimately hit consumers in the pocket book.

 CHBA became aware of this issue a few weeks ago, and after speaking with HBAs, members and drywall suppliers, submitted its concerns to CBSA to inform the first stage of its investigation. CHBA’s concern focused on the impact that an immediate application of a large duty on drywall would have on builders and home buyers supply and price in Western Canada.

With the decision rendered by CBSA on Sept. 6 to impose exorbitant duties on U.S. drywall, CHBA has engaged with trade experts and legal counsel to explore additional options to address the issue.

As a first step, CHBA has submitted to participate in the Canadian International Trade Tribunal's (CITT) inquiry as to the extent of injury to the domestic market, where it hopes to see the duties reduced or eliminated.

The CITT’s anti-dumping investigation looks only at the industry in question — in this case the drywall industry. As a result, the residential construction industry, as users of the product, does not get consideration at this stage, the CHBA noted. 

“If the CITT upholds the duties through the next stage of the process, CHBA believes it has a very strong case for an appeal based on the public interest for housing affordability, the vulnerability of housing markets in Western Canada and the impact this duty has on drywall supply and price throughout Canada,” said Rob Lemire, president of the CHBA chapter. “Further, although that process is typically begun after the CITT determination, CHBA is engaging politically to raise awareness of this issue and potentially accelerate action.”

Lemire, of Cypress Insurance Brokers, was elected president at Wednesday’s AGM of the association. Kelly Reid of HKR Builders and Marlene Anderson of Tri-AMM Developments Corp. were elected first and second vice-presidents, respectively.

Mario Piroddi, BDO Canada LLP remains as treasurer amd Steve DuMont, Gillespie and Company LLP, continues as secretary. Matt McCurrach, Homex Development Corp., is past president.

Elected directors were: Alex Rugolo – KPMG; Bev Wassen-Hunter, BMO Bank of Montreal; Ron Wrabel – Wrabel Brothers Construction Ltd.; Ryan Kurzac, Kamloops Home Hardware Building Centre and Tom Calne, Fulcrum Development.

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